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Filed under: Analyst reports, Bad news, Stocks to Sell, E*TRADE (ETFC)

NEW YORK, Jun 18, 2008 (BUSINESS WIRE) -- E*TRADE FINANCIAL Corporation today released its Monthly Activity Report for May. The Company's total retail customer assets increased 3.9 percent sequentially to $180.9 billion. Total Daily Average Revenue Trades increased 4.1 percent month over month. Net new retail accounts grew by more than 21,000.

"The growth in customer accounts, assets and activity in May further supports the restored confidence of our retail customer base," said Donald H. Layton, Chairman and Chief Executive Officer, E*TRADE FINANCIAL Corporation. "Additionally, the q

On November 29, 2007 Citadel invested $2.5 billion of cash into E*Trade (ETFC). Citadel had been “scrutinizing E*Trade’s balance sheet” since July 2007, when E*Trade first reported its mortgage market problems in a conference call. “So Citadel understood better than most—even E*Trade management—not only how serious its problems were but also the real value of E*Trade’s business” (source).

With this transaction, Citadel also became E*Trade’s largest shareholder with 20% of E*Trade’s stock. At this time Citadel owns 89.53 million shares; and holds $1.75 billion of 10-year bonds at 12.5% i

One of the most competitive spaces right now must be the online brokerage business.<!----> It is to be expected: it is an industry with relatively low barriers for entry and a huge potential market. As the stock market is democratized by the power of the Internet and its abundance of quality information, the need for full-service brokers is dwindling.

This is not new, and the process hasbeen going on for years now. Yet, full-service brokers still havesignificant number of customers who the online brokers are constantlyvying for. Likewise, new generations of would-be investors join themass o

First a couple of definitions:<!---->

The 'magic moment': When a turnaround stock starts to turn vertical, pros call it 'getting re-rated'.

Contrary to consumer behavior in retail, investors tend to shy away from the stock market when shares are cheap, but seem to be drawn to it like moths to a flame during market bubbles, when prices are highly inflated.<!----> In its June 2008 issue, The Wall Street Journal’s magazine “Smart Money” published a chart showing how investors are pulling money out of mutual funds during down markets. In other words, they are selling low.

Another example: Between 1973 and 2002, NASDAQ stocks gained an annual average of 9.6%. Yet, on average, investors only earned about 4.3% annually. One reas

E*Trade's (ETFC) management is doing a superb job in correcting the errors of the past and bettering the firm's position for the future. <!---->Through of a series of brilliant marketing campaigns (i.e. funny baby commercial) and creative initiatives (global trading), the company has managed to retain its retail client base. The April activity report was surprisingly bullish, as average revenue trades were up 5.8% year over year while the stock was trading at 6 times its current value. While management has disclosed that further writedowns and capital dilution may quite possibly occur, thes

Recap of CNBC's Fast Money, Wednesday May 14.
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Yahoo (YHOO), Microsoft (MSFT), Google (GOOG)

On Icahn’s decision to pursue Yahoo, Karen Finerman doesn’t think the risk/reward is worth it and believes a lot of the Icahn factor is already priced in. She is uncertain whether MSFT is still interested in the deal. She thinks Icahn’s radical proposals to reform Yahoo’s board might interfere with rather than facilitate a deal. Macke thinks Icahn will succeed and MSFT will return to the table. While Najarian agrees MSFT may still pursue Yahoo, he sold half of his Yahoo position. Adami woul

On April 25, Dean Laster wrote an intriguing article regarding the fact that E*Trade’s (ETFC) stock has short interest sitting at 20% of the stock’s float (see “Why the E*Trade Shorts Have It Wrong”).<!----> Mr. Laster pointed out that E*Trade has no “downside catalyst” and that all the the bad news is priced into the $4 existing stock price. In fact E*Trade’s April 17th Earnings Conference Call presented many positive upside trends for both the brokerage business and the mortgage portfolio performance, so “shorts are in effect digging their own graves.”

This week, on Wednesday May 7

E*Trade's (ETFC) management is doing everything right to turn thecompany around, and their efforts will reap benefits for shareholderssooner rather than later. The stock has obviously taken a serious hitdue to its careless investments in commercial mortgage-backedsecurities and other derivative products.<!--more--> The company has also done agreat job disclosing the magnitude of future writedowns, namely $3billion over the next two years, which in turn has painted a clearerpicture of future performance. Joe Moglia, the CEO of TD Ameritrade (AMTD),recently mentioned on CNBC's Fast Money that